Merck AnalysisEssay Preview: Merck AnalysisReport this essayTheir appraisal system was introduced in 1978Merck rates employees based on scale from 1 to 5Mercks performance appraisal system was the biggest issue in identifying and regarding performance and therefore no one ever seems to be satisfied with it
Outstanding employees get salary increase only marginally better than average performing employeeManagers afraid to give experienced people low rating which does not encourage further learning and growthLack of equity because bosses were afraid to give anything bellow average (majority of employees are rated between 3-4 leading to creation of sense that everything is on satisfying level and therefore no need for aggressive further development)
Companys review committee felt that the only way is that we need to improve as a company diminishing importance of personal development and further individual growth
In order for them to become learning company Merck should implement absolute rating and adopt relative among the employees which would make employees more competitive and keen for further growth and development
Majority of people get average grades, very few people graded 5 or 1. This is supported by the data in Exhibit A2:Only 1.42% received 5Only 0.12% received a grade of 1Inadequate rewards for excellent performersThe limitation of 125% compa-ratio limits the opportunity to reward high performersNo clear criteria to assign a certain gradeManagers are afraid to give experienced employees grades 1,2 or 3Some managers refuse to give a 5Over-performers leave because they didnt receive adequate rewards and underperformers stay within the organizationLack of alignment between performance grading and actual company performanceManagers dont “play by the same rules”Most of the problems are evident in exhibit A2, but not all of them (e.g. lack of clear evaluation criteria cannot be observed)
Lack of alignment in the managers to be fair, not the CEO/ CEO/ CEO (or executives in positions of authority that are under more influence)Lack of accountability and leadership with respect to performance criteria ᲤPoor internal and external accountability at all levels of the company•Failure to follow appropriate management style guidelines for the performance evaluation of company performance at all levels (and all levels of management must adhere to these guidelines)Hegemonic behaviour in management ᤄPoor governance, organizational integrity, failure to address issues that cause unnecessary risk and disruption and underinvestingIn a situation where management can be made to make decisions over performance metrics and for what purpose, poor governance can have the highest consequences of bad performance evaluations (even more as of recent)•Possible management bias, lack of understanding, lack of competence, leadership skills, etc. at a company that has grown out of the failures of other companies in the S&P 500 to become such huge, diverse, successful companies, and lack of a sense of community when dealing with issues such as over-performance (eg. over-performance by management, over-performing by other executives).•Failure to take a proactive approach to ensure an increase in performance when management fails to follow the proper rules and adhere to effective management guidelines (eg. for instance, management failure to comply with company performance standards and follow company compliance plans)•Failure to take a leadership approach to ensuring the success of the company at the scale management wants, but lacks the institutional and social support necessary to do soAchieve high performance while holding the same level of focus, accountability, and integrity with respect to performance-to-value as at other firms.•Failure to meet the level of engagement and engagement in this sector by following the proper leadership and leadership approach during the company performance evaluation process that is required to ensure an increased level of engagement and engagement for this sector of the companyAchieve and maintain success at the same time, consistently and effectively.•Failure to adhere to and adhere to the “best practices” outlined in FCS, including by working towards the best practices of meeting companies performance benchmarks that align well with performance benchmarks of other companies.•Failure to follow the same standard for leadership and company performance that applied to other companies under FCS or in FCS-based organizations.•Failure to follow FCS-based corporate governance standards and best practices outlined in FCS and FCS-based organizations.•Failure to fully take the steps necessary to create, maintain, implement and implement a comprehensive plan and vision to achieve a sustained growth plan that is mutually beneficial to both the company and the stakeholders, and does not threaten the viability of the company.•Failure to follow FCS-Based Management Standards and Best Practices and follow effective and efficient organizational and management practices consistent with FCS standards and best practices outlined in FCS and FCS-based organizations.•Failure to follow FCS-Based Corporate Governance Standards and Best Practices developed or implemented by FCS, FCS-based organizations and FCS-based organizations.•Failure to follow FCS